Mr. Vivek Vaidya, Vice President of Mobility at Frost & Sullivan, said that the projected decline in total industry volume (TIV) in 2016 was due to economic pressures, the weakening Ringgit, price increase and tightening of credit approvals.

"OEMs are compelled to increase the prices due to rising costs," he added. "If the crude oil price continues on its downward spiral, the Ringgit will also continue to weaken, putting immense pressure on OEMs as well as component suppliers."

On a more positive note, several key models are scheduled to be launched in 2016, which should help in pushing sales of vehicles. The continuation of various incentives under the National Automotive Policy based on EEVs and localization will also help OEMs in increasing their competitiveness and in maintaining their prices.

"New and exciting model launches coupled with promotions would be the go-to strategy for OEMs," said Mr. Vaidya.

2015 Review

Frost & Sullivan expects vehicle sales in 2015 to end at 657,500 units, a decline of 1.3 per cent year-on-year, due to the implementation of GST and the weakening Ringgit.

"Despite several OEMs reducing the prices of cars after the implementation of GST, the economic downturn, weakening Ringgit, and increase in cost of living and cost-of-ownership discouraged buyers from making big purchases," Mr. Vaidya said.

Passenger vehicles market share by OEMs in 2015

Passenger Vehicles sales reached approximately 583,000 units in 2015, which is a 0.9 per cent decline over 2014. Passenger Cars and MPVs declined where as SUVs grew 87 per cent. Perodua leads the market with 36.2 per cent share of the passenger vehicle segment while Honda consolidated its hold in non-national car segment with 15.9 per cent market share.

"Honda's market share growth was backed by strong sales of the Jazz, City and the newly launched HR-V," said Mr. Vaidya. "Despite tough market conditions, the passenger vehicle segment also saw several model/facelift introductions, which includes the Myvi, HR-V, Mercedes C-Class, and Mazda3."

In the Luxury Cars category, Mercedes-Benz had an outstanding year. The company's market share grew from 32 per cent in 2014 to 48 per cent in 2015. Introduction of the locally assembled Mercedes-Benz C-Class boosted sales in 2015.

Commercial vehicles market share by OEMs in 2015

Mr. Vaidya said that commercial vehicle sales declined 4.6 per cent to 74,500 units in 2015. Pick-ups saw a marginal growth of 1 per cent but other categories declined. Toyota continues to lead the commercial vehicle market with a 36.8 per cent share.

He added, "Pick-ups account for approximately 73 per cent of the commercial vehicle market. Sales of pick-ups is led by Toyota Hilux, Ford Ranger & Isuzu D-Max."

In 2015, Isuzu launched 2 variants of its D-Max i.e., D-Max Diablo (special edition) & V-Cross. New generations of the Mitsubishi Triton and Nissan Navara were launched while a facelift of the Ford Ranger was also introduced.

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